Unit owners irked by board decision on garage staff

October 04, 2013|Howard Dakoff | Condo Adviser

Condominium declarations grant the board broad authority to make business decisions relating to the administration of the association. (Gabor Izso, E )

Q: I live in a high-rise condominium. Our seven-person board decided to terminate our garage staff to go to self-park without input from the unit owners. Many unit owners believe there will be adverse repercussions. Is there anything the unit owners can do to stop this decision?

A: Condominium declarations, Section 18.4 of the Condominium Act, and Illinois case law grant the board very broad authority to make business decisions relating to the administration of the association.

Unit owners elect directors to the board, and those directors make decisions on behalf of the association in their business judgment, which sometimes clashes with individual unit owner opinions. Unit owners do not have the authority to overturn board decisions relating to administration of the common elements.

The remedy for unit owners who are dissatisfied with board decisions is to exercise their opinion at the ballot box and elect a majority of the board who share their views and/or philosophies.

Q: I live in a condominium building of 28 units, and as far as we know, one unit has not paid real estate taxes in more than a year. The unit owner has abandoned his unit. Are the 27 remaining units required to pay that unit's unpaid real estate taxes?

A: When a unit owner fails to pay real estate taxes, the remaining unit owners are not required to pay for the real estate tax deficiency. The legal effect of failing to pay real estate taxes is that those unpaid taxes will be sold to a third party, and if the unit owner fails to redeem the taxes within the statutory redemption period, the unit owner will lose title to his unit (for nonpayment of a few thousand dollars).

The only concern the other unit owners should have is if the unit owner is also delinquent in the payment of assessments. A confirmed tax sale will wipe out any unpaid assessments through the date the tax deed conveys title to the unit to a third party; however, the new unit owner is responsible for the payment of assessments prospectively from that date.

Q: Since the 2007 tax year, our condominium board has filed a tax appeal on behalf of all unit owners, of which only four out of the six years were successful in lowering the assessed valuation, which did not equate to a lower real estate tax bill. Not a result worth the money in legal fees. Shouldn't the unit owners be allowed to opt out before a tax attorney is engaged on their behalf?

A: Real estate tax bills are computed by multiplying assessed value by applicable tax rate (less exemptions). A common homeowner misconception is that a reduction in assessed value always correlates to a reduction in the real estate tax bill.

Commonly, municipalities allow a reduction in assessed value but will then increase the tax rate because the municipality still needs the same or more income to operate. Thus, reduction in assessed value may not always correlate to a reduced tax bill. Homeowners should be advised that in the absence of a reduction in assessed value, with increased tax rates, the real estate tax bill could have increased substantially, so there still was a savings.

Section 10 of the Condominium Act grants the board the authority to retain an attorney to challenge real estate assessed values on behalf of all unit owners, and the cost thereof is a common expense. There is no requirement that unit owners be entitled to opt out.